Sebi clears Indian Hotels rights issue worth up to Rs 1,000 crore

The Securities and Exchange Board of India (Sebi) has given approval to Indian Hotels Company's proposal to raise up to Rs 1,000 crore from rights issue.

In rights issue, shares are issued to existing investors as per their holding at pre-determined price and ratio.

Tata group firm Indian Hotels Company had filed draft documents for the rights issue with the market regulator in April.

The regulator received the draft documents through lead manager JM Financial Institutional Securities on April 23 and issued its 'observations' on June 2, according to the latest update by the market regulator.

Issuance of 'observations' on offer documents by Sebi is considered as a clearance to the issuer to go ahead with the share issues through routes like IPOs, FPOs and rights issue.

The company plans to utilise the proceeds of the issue towards "part funding of capital expenditure proposed to be incurred by the company for construction of Vivanta by Taj, Guwahati" as well as to fund the renovation proposed to be undertaken at some of the company's existing hotels.

Also, the amount would be for repayment or pre-payment of certain borrowings of the company and general corporate purposes.